Why as Many as 33% of Your Customers Abandon Their Purchase Online

In my last post “Is Your Shopping Cart Costing You Sales”, I wrote about the amount of money you could be losing in lost sales due to users abandoning your shopping cart. In this post, I want to address the number one reason people don’t complete their purchases. In fact, according to a study done by the Baymard Institute in 2013, a full 33% of users DO NOT complete their purchase after placing at least one item in their cart because of extra costs added to their order, often late in the checkout process. Extra fees such as shipping, taxes, fees, or packaging charges are often necessary. But if they are not clearly shown to the customer and more importantly shown early, the customer can feel tricked or “nickel and dimed”. Ultimately this leaves a bad taste in the customer’s mouth and can lead to abandonment of the checkout process and even worse, a lost customer forever.

Most customers want to know the full price of their purchase as early as possible. Making them go through several screens and give lots of information before showing them the total tends to scare them away. On our site, the only extra charge we have is shipping. Our goal is to show them all their shipping options and costs as early as possible so they can make an informed decision on whether or not they want to continue with their purchase. When a consumer views a product on our site, they are asked to provide the zip code to which they’ll be shipping the product before they add it to their cart (see image below)

Once they’ve added it to their cart, we then show them a calendar giving them all the available delivery dates and the shipping cost based on that product and zip code. Each date shows the cost to get it there on that day. Mousing over the day shows you when it will ship and how it will ship (see screen below)

Showing the customer the shipping information early and in calendar format allows them to make an informed choice before committing to purchasing a product

We found that by showing this information before requiring the customer to enter a full shipping address increased our conversions tremendously. Not only are we showing the cost early, we’re showing all the options to get it to the recipient on different days.

If there are extra fees that need to be added, and you can’t show them right away, you should make it as clear as possible to the user that the extra cost has been added. This can be done by highlighting the new cost in some way, or giving some other kind of clear indication that it has been applied. If you’re site is set up in such a way that this new cost (i.e. shipping) is contingent on the consumer giving you some information (like a zip code), make sure the change in cost being applied shows up as close to the input field as possible. Also, if the users input is going to change a fee (like changing a shipping method), be sure to show the user the new charge as soon as they make the change (see image below) Otherwise, you run the risk of them not noticing the change and becoming confused or irritated.

It’s important to show clearly and instantly any changes in price based on a user’s action (such as changing a shipping method)

There is one way that you can avoid extra charges all together. Some companies simply “bake in” these extra costs into their products to avoid any user animosity. Take shipping for example. Many companies advertise “free shipping” on their websites. Well, we all know that it certainly isn’t free. I’m sure FedEx and UPS aren’t delivering these products for free. It’s simply baked into the price of the product.

This can be an effective strategy since you’re really accomplishing two things. First, you’re giving your customer the full “all in” price right from the beginning. Second, you’re going to make the checkout process that much simpler since you don’t have to introduce or point out any additional fees along the way. The challenge here is that you need to make sure that this doesn’t increase the price of your product so much that the consumer feels it’s too expensive.

This will be the case if you sell a product with an expected price. For example, a person I know sells pies in Florida. The pies sell for $19.99 at his store. He has an online presence as well. On his site, these same pies sell for $49.99 and plastered all over the site are the words “Free Shipping!”. In my opinion, this has the reverse affect. Most people know in general what a pie costs. They know that spending $49.99 for a pie is ridiculous. Add to that the fact that he’s celebrating and boasting about free shipping. I feel that makes a user feel like they’re being perceived as stupid. Most people are happy to pay the shipping charge if they feel it’s a fair amount. This is the reason why we don’t bake the cost of shipping into our product. . Depending on where you live, most consumers expect to spend anywhere from $3.00 to $4.00 dollars for a gourmet cupcake. Each of our cupcake jars contains the equivalent of 2 cupcakes by weight. So if you bought 2 jars on our site, you’d get the equivalent of 4 cupcakes. Therefore, the general expectation would be to spend between $12.00 and $16.00. We charge $15.95 for a 2 jar pack, so once you factor in the jar and the packaging, this doesn’t seem unreasonable to most people.

If we tried to then add our shipping cost to the product cost, most people would feel like they were being somehow deceived or that the value wouldn’t be good. We prefer to give them the shipping options and costs, and let them make the best decision for themselves early on in the process.
So the bottom line here is, show as much as you can as early as you can. Consumers are willing to spend money if they feel the value is there. They don’t like it however if they feel they are being deceived or tricked. We know our product is expensive. We also know that it’s expensive to ship (cupcakes in jars are heavy!!). But we don’t try to hide that from our customers or trick them in any way. We give them all the information up front so they can decide for themselves. Imagine that – honesty. Even with those shipping prices, we still have a conversion rate that most companies only dream of.

In my next post, I’ll discuss one of my personal pet peeves and the reason why a reported 23% of customers abandon their purchase.